Timberon water woes

Mike Nivison resigns as receiver due to health reasons

Alamogordo Daily NewsBy Laura London, Staff Writer

Posted:
12/10/2011 09:45:11 PM MST

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Mike Nivison, left, and his attorney Zach Cook, listen to court proceedings Friday morning in 12th Judicial District Court. The judge in the case ruled that Nivison could resign as receiver of the Timberon Water and Sanitation District. Nivison cited health problems as a reason for resigning.

A hearing was held Friday for the ongoing lawsuit of Virgil Beagles vs. the Timberon Water and Sanitation District, and the judge relieved Michael Nivison of his duties as receiver for the district.

According to court records posted online, the lawsuit started in July 2008 with a complaint alleging the TWSD violated the Public Records Act. Dennis Karnes was appointed as receiver for the TWSD in August 2010, then he was removed from the position in July 2011 and Nivison was appointed receiver.

Zachary Cook, attorney for Nivison, said during the hearing Friday that Nivison has heart problems so he wants to resign as receiver and focus on his health. Nivison added he had seen no significant benefit from the heart medications he was taking, and his doctor and cardiac specialist advised he discontinue his service to Timberon.

According to court records posted online, all 12th Judicial District judges were recused from the case by the plaintiffs, and the state Supreme Court assigned 7th Judicial District Court Judge Matthew G. Reynolds in August 2008. Reynolds conducted Friday's hearing via video from Truth or Consequences.

Reynolds said Beagles' attorney Doug Perrin had filed an objection to Nivison's motion to resign as receiver, with the primary reason being Perrin wanted to keep open the possibility to object to Nivison's discharge from liability for malfeasance.

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Reynolds said he considered that when he issued his order Thursday, part of which he read.

Reynolds' order stated the judge saw that plaintiffs had a point when they said they didn't want the receiver discharged from liability until the court could hold a hearing on the merits of their claim of malfeasance. Reynolds read the court has statutory authority to relieve the receiver of his duties and await settlement of his final report and account before discharging him from liability.

"So that's what I'm doing today," Reynolds said. "I'm balancing the need for Mr. Nivison to be free from further activities as the receiver and protecting your rights to object to his discharge from liability, Mr. Beagles."

Court records posted online indicate Nivison's final report was submitted Dec. 2 and filed by the court Dec. 5. Reynolds said his order and the final report were transferred to plaintiff's counsel, and anyone who wants to object to the final report has 10 days to contact Reynolds' assistant Josie Gutierrez at (575) 894-7167 ext. 24.

Reynolds said Gutierrez can fax a copy of the report, but it is also available at the 12th Judicial District clerk's office.

Reynolds told Nivison he was relieved of his duties as receiver as of Friday and excused him from the courtroom because he didn't want Nivison to be under any more stress than he already was.

Reynolds asked Cook to remain in court, however, to prepare the order and to see if the TWSD board of directors would take over day-to-day operations until Jan. 13, 2012, or if another receiver would be appointed. Reynolds ultimately ordered the board to take over until Jan. 13; however, the board is not to make any major decisions like hiring or firing staff, but merely to pay bills and keep the TWSD functioning.

Reynolds said Friday's hearing was the annual hearing established Jan. 24, 2011, in his receivership order. The annual hearing is to determine whether the receivership should continue. He invited the public attending the hearing to share their thoughts and opinions.

Arden Schug, TWSD board member and defendant listed in the lawsuit, said he saw no problem with the board answering to the judge as a receiver would. He said the people of Timberon would like to see home rule.

Beagles said he thought the receivership needs to continue since he has not seen a complete audit or balanced budget for the TWSD, and that was the main purpose of the receivership from the start.

Reynolds said Beagles' attorney asked for a continuance until Jan. 13 and Reynolds had granted that.

Joe Mainello, another TWSD board member and defendant, said since Nivison has been receiver, TWSD has gone forward with the audits.

"I see a little light at the end of the tunnel as far as getting us back in to financial stability where the district needs to be," Mainello said. "Whereas a full year went by and none of that was accomplished. Mr. Nivison was kind enough to at least discuss things with the board and realize what was needed to get the district back on its feet."

Mainello said even though Nivison was not there to hear his comments, he wanted to go on the record in congratulating Nivison for having done so much in a short time with very limited resources.

Cook said Nivison didn't have a position on whether authority of the TWSD should be given back to the board or if the receivership should continue, but in the case of the latter, Nivison had recommended Dr. Martin Moore as the next receiver.

Reynolds said he will make a final decision Jan. 13 on the continuation of the receivership. In the meantime, he said he would grant the board of directors limited authority for conducting essential business of the district. He also wanted the board to continue the work done by Nivison for the audits.

"Mr. Beagles makes a good point that the primary reason for this receivership was because of the disarray of the books," Reynolds said. "I did read the final report -- I'll wait to hear from Mr. Beagle's attorney, Mr. Perrin, in January on that. Maybe something could be worked out ... but it would be good to see actually the books in order."

Reynolds said the board could hire legal counsel, but not initiate any new actions or enter any binding agreements without court order. He told Cook to prepare the order granting permission for Nivison to resign but reserving the judge's decision on discharging Nivison from liability until settlement of the final account on Jan. 13.

Reynolds said if Nivison can't physically attend the Jan. 13 hearing and if there is any filing from Beagles or a Timberon resident, Cook should go over the materials with Nivison and, if Nivison has a response, prepare an affidavit for Nivison's signature.

"We'll just have to play it by ear because what I don't want him to do is have a heart attack while he's in court," Reynolds said.

Reynolds said if the hearing can't be held in Alamogordo on Jan. 13, then it will be held in Truth or Consequences. Cook expressed concern that people from Timberon who wanted to support Nivison against the malfeasance allegations may not be able to make the long trip to T or C.

Reynolds said he would do his best to have the Jan. 13 hearing in Alamogordo, but regardless of where it will be held, Nivison will be allowed to attend by telephone.